Keller Group issues profit warning after fraud found at Australia unit

9th Jan 2023 07:24

(Sharecast News) - Ground engineering contractor Keller Group issued a profit warning after uncovering financial fraud at its Australia business that resulted in two directors being sacked.

In what it called a "deliberate and sophisticated" reporting fraud at Austral, a civil, mining and marine contractor, profits from 2019 onwards had been overstated.

The impact of the fraud on historical operating profits is currently estimated to be £6m related to the first half of 2022, and £8m to £10m relating to prior years.

"Whilst the fraud continued in the second half of 2022, and has impacted the board's expectations for the 2022 full year results, the group's overall performance in the second half has been strong, and therefore the board now expects the group to report a full year operating profit slightly below the bottom end of the range of market expectations," Keller said in a statement on Monday.

The Austral business contributes about 3% to the group's revenue. Keller maintained its fiscal forecast for 2023.

Analysts, on average, expect full-year operating profit in the range of £109m-114m, according to a company-provided consensus.

Reporting by Frank Prenesti for Sharecast.com